Financial Analysis

Note 9 Borrowings Federal Home Loan Bank (FHLB) advances consist of the following at September 30, 2025 and December 31, 2024 ( in thousands): September 30, 2025 December 31, 2024 Amount Weighted Interest Rate Amount Weighted Interest Rate FHLB Borrowings $ 45,000 4.69 % $ 47,855 4.50 % The following table presents the balance and unamortized issuance costs of the subordinated debt and senior debt at September 30, 2025 are as follows (in thousands): Principal Unamortized Debt Issuance Costs Net 6.5 % subordinated notes, due December 31, 2028 $ 8,000 $ - $ 8,000 11.0 % senior notes, due March 1, 2028 $ 9,750 $ 414 $ 9,336 11.0 % senior notes, due March 1, 2028 $ 250 $ 11 $ 239 The balance of senior debt, net of unamortized debt issuance costs, was $9.6 million at September 30, 2025. The balance of subordinated debt was $8.0 million and $22.0 million at September 30, 2025 and December 31, 2024, respectively. …

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Note 10 Stock Compensation Plans Employee Stock Ownership Plan The Company maintains an Employee Stock Ownership Plan (ESOP) for the benefit of employees who meet the eligibility requirements of the plan. The Bank may make cash contributions to the ESOP on a quarterly basis which are allocated to participant accounts on an annual basis. During the three and nine months ended September 30, 2025 and 2024, the Company did not make a discretionary contribution of shares to the ESOP. During the nine months ended September 30, 2025 and 2024, the Company recognized $108,000 and $94,000 of ESOP expense, respectively. Stock Incentive Plans Share Awards In May 2018, the shareholders of Quaint Oak Bancorp approved the adoption of the 2018 Stock Incentive Plan (the 2018 Stock Incentive Plan). The 2018 Stock Incentive Plan approved by shareholders in May 2018 covered a total of 155,000 shares, of which 38,750, or 25%, may be restricted stock awards, for a balance of 116,250 stock options assuming all the restricted shares are awarded. In May 2023, the shareholders of Quaint Oak Bancorp approved the adoption of the 2023 Stock Incentive Plan (the 2023 Stock Incentive Plan). The 2023 Stock Incentive Plan approved by shareholders in May 2023 covered a total of 175,000 shares, of which 43,750, or 25%, may be restricted stock awards, for a balance of 131,250 stock options assuming all the restricted shares are awarded. In September 2025, 12,500 shares that were available under the 2023 Stock In …

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Note 11 Fair Value Measurements and Fair Values of Financial Instruments Fair value estimates are based on quoted market prices, if available, quoted market prices of similar assets or liabilities, or the present value of expected future cash flows and other valuation techniques. These valuations are significantly affected by discount rates, cash flow assumptions, and risk assumptions used. Therefore, fair values estimates may not be substantiated by comparison to independent markets and are not intended to reflect the proceeds that may be realizable in an immediate settlement of the instruments. Fair value is determined at one point in time and is not representative of future value. These amounts do not reflect the total value of a going concern organization. Management does not have the intention to dispose of a significant portion of its assets and liabilities and therefore, the unrealized gains or losses should not be interpreted as a forecast of future earnings and cash flows. The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing are as follows: Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level II: Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nat …

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Note 7 Goodwill and Other Intangible, Net On August 1, 2016, Quaint Oak Insurance Agency, LLC began operations by acquiring the renewal rights to a book of business produced and serviced by an independent insurance agency located in New Britain, Pennsylvania, that provides a broad range of personal and commercial insurance coverage solutions. The Company paid $1.0 million for these rights. Based on a valuation, $515,000 of the purchase price was determined to be goodwill and $485,000 was determined to be related to the renewal rights to the book of business and deemed to be an other intangible asset. This other intangible asset is being amortized over a ten year period based upon the annual retention rate of the book of business. The balance of other intangible asset at September 30, 2025 and 2024 was $40,000, and $89,000, respectively, which is net of accumulated amortization of $445,000 and $396,000, respectively. Amortization expense for both the three and nine months ended September 30, 2025 and 2024 amounted to approximately $12,000 and $36,000, respectively. …

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Accounting Pronouncements Not Yet Adopted . In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for public business entities for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this new guidance on its financial statements.

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Note 12 Operating Segments ASC Topic 820 Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Companys Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company has applied the aggregation criterion set forth in this codification to the results of its operations. The Company's operations currently consist of two reportable operating segments: Banking and Oakmont Commercial. The Company offers different products and services through its two segments. The accounting policies of the segments are generally the same as those of the consolidated company. The Banking Segment generates its revenues primarily from its lending, deposit gathering and fee business activities. The profitability of this segment's operations depends primarily on its net interest income after provision for credit losses, which is the difference between interest earned on interest earning assets and interest paid on interest bearing liabilities less provision for credit losses. The provision for credit losses is almost entirely dependent on changes in the Banking Segment's loan portfolio and managements assessment of the collectability of the loan portfolio as well as prevailing economic and market conditions. The profitability of this segments operations also depends on the generation of non-interest income which includes fees and commissions generated by Quaint Oak Bank …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing